Coinbase, a cryptocurrency exchange based in the United States, is continuing its efforts to gain access to the personal communications of Gary Gensler, the financial regulator, arguing that these communications are relevant to its ongoing legal battle. Coinbase initially requested Gensler’s personal communications in April, specifically documents related to cryptocurrency dating back to 2017.
In response to Coinbase’s request, the Securities and Exchange Commission (SEC) attempted to block it in a letter to District Court Judge Katherine Failla on June 28, stating that it had rejected the proposal. However, Coinbase has challenged this in a letter filed on July 3, asserting that Gensler’s personal communications about the regulatory status of digital assets and cryptocurrency exchanges during his time as SEC chair are essential to its defense.
Coinbase’s lawyers argue that Gensler’s personal communications are critical to their case, emphasizing that Gensler has expressed his views and communicated with market participants in his personal capacity. They believe that investigating his private messages would provide valuable insights. They also claim that Gensler’s communications both during and before his tenure as SEC chair are equally important, as they would help them understand his evolving thinking on regulatory matters.
Coinbase’s Chief Legal Officer, Paul Grewal, further explained their efforts for “reasonable discovery” in a post on July 3, stating that they are responding to the SEC’s attempt to block access to Gensler’s communications in a case that the SEC initiated.
The SEC sued Coinbase in June 2023, alleging that the exchange had violated federal securities laws by listing 13 tokens as securities and operating as an unregistered securities broker since 2019, well before its initial public offering in April 2021. Coinbase argues that the tokens listed on its exchange should not be classified as securities and fall outside the scope of SEC regulations.
In the face of this legal battle, the SEC is now confronted with the formidable legal firepower of the cryptocurrency industry, much like the clash between Godzilla and Kong.